-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TE1ea3zqUaBOYfKzeyCe1SzIPEmOtRToI1lmJi7ITDp6ZWjwqguIG5NwoR2YjndJ QbPm5AivNU8XbUSfK/I6sg== 0000950129-04-008154.txt : 20041028 0000950129-04-008154.hdr.sgml : 20041028 20041028104204 ACCESSION NUMBER: 0000950129-04-008154 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20041026 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041028 DATE AS OF CHANGE: 20041028 FILER: COMPANY DATA: COMPANY CONFORMED NAME: APACHE CORP CENTRAL INDEX KEY: 0000006769 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 410747868 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-04300 FILM NUMBER: 041101299 BUSINESS ADDRESS: STREET 1: 2000 POST OAK BLVD STREET 2: ONE POST OAK CENTER STE 100 CITY: HOUSTON STATE: TX ZIP: 77056-4400 BUSINESS PHONE: 7132966000 MAIL ADDRESS: STREET 1: 2000 POST OAK BLVD STREET 2: STE 100 CITY: HOUSTON STATE: TX ZIP: 77056-4400 FORMER COMPANY: FORMER CONFORMED NAME: APACHE OIL CORP DATE OF NAME CHANGE: 19660830 8-K 1 h19489e8vk.txt APACHE CORPORATION - OCTOBER 26, 2004 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): October 26, 2004 APACHE CORPORATION (Exact name of registrant as specified in Charter) DELAWARE 1-4300 41-0747868 (State or Other Jurisdiction (Commission (I.R.S. Employer of Incorporation) File Number) Identification Number)
2000 POST OAK BOULEVARD SUITE 100 HOUSTON, TEXAS 77056-4400 (Address of Principal Executive Offices) Registrant's telephone number, including area code: (713) 296-6000 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ The information in this Current Report is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act"), or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as set forth by specific reference in such filing. ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On October 28, 2004, Apache Corporation issued a press release announcing financial and operating results for the fiscal quarter ended September 30, 2004. The full text of the press release is listed and furnished under Item 9.01 as Exhibit 99.1 and incorporated herein by reference. ITEM 7.01. REGULATION FD DISCLOSURE. On October 26, 2004, Apache Corporation issued a press release announcing that it had achieved the second threshold in its share appreciation plan. Under the plan, approximately 1,900 employees will share special incentives in the form of Apache stock paid in three annual installments. The full text of the press release is listed and furnished under Item 9.01 as Exhibit 99.2 and incorporated herein by reference. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS. (c) EXHIBITS.
EXHIBIT NO. DESCRIPTION 99.1 Press Release dated October 28, 2004, "Apache's Third - Quarter Earnings Rise 57 Percent to Record $432 Million, or $1.31 per Share, on Strong Prices, Record Production" 99.2 Press Release dated October 26, 2004, "Apache Employees Rewarded for Shareholder Value Increase of $9 Billion-Plus in Four Years"
3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. APACHE CORPORATION Date: October 28, 2004 /s/ Roger B. Plank ----------------------------- Roger B. Plank Executive Vice President and Chief Financial Officer 4 INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION 99.1 Press Release dated October 28, 2004, "Apache's Third - Quarter Earnings Rise 57 Percent to Record $432 Million, or $1.31 per Share, on Strong Prices, Record Production" 99.2 Press Release dated October 26, 2004, "Apache Employees Rewarded for Shareholder Value Increase of $9 Billion-Plus in Four Years"
EX-99.1 2 h19489exv99w1.txt PRESS RELEASE DATED OCTOBER 28, 2004 Exhibit 99.1 CONTACTS: (MEDIA): BILL MINTZ (713/296-7276) DAVID HIGGINS (713/296-6690) (INVESTOR): ROBERT DYE (713/296-6662) (WEB SITE): WWW.APACHECORP.COM FOR RELEASE AT 7:45 A.M. CENTRAL TIME APACHE'S THIRD-QUARTER EARNINGS RISE 57 PERCENT TO RECORD $432 MILLION, OR $1.31 PER SHARE, ON STRONG PRICES, RECORD PRODUCTION Houston, Oct. 28, 2004 - Apache Corporation (NYSE, Nasdaq: APA) today reported record third-quarter earnings of $432 million, or $1.31 per diluted common share, up 57 percent from $276 million, or 84 cents per share in the prior-year period. The combination of continued strong prices for both oil and natural gas and record oil production fueled Apache's results. Apache's earnings improved 16 percent over the previous record, $372 million or $1.13 per share, which was reported in the second quarter of 2004. Cash from operations before changes in operating assets and liabilities totaled a record $883 million in the third quarter, up from $731 million in the year-earlier period. (This is a non-GAAP measure; see reconciliation below.) Apache's third-quarter earnings were reduced by 6 cents per share because of the impact of foreign currency swings on deferred taxes and by 4 cents per share because production was curtailed by Hurricane Ivan. Apache's worldwide daily production averaged 458,412 barrels of oil equivalent during the third quarter, up 2 percent from the prior-year period. Liquid hydrocarbon production averaged 252,800 barrels per day, up 6 percent from the prior-year period and an 8 percent increase from the second quarter of 2004. Higher production in Australia, the North Sea and China more than offset the impact of Hurricane Ivan, which reduced Apache's U.S. oil production by 4,042 barrels per day during the quarter. Natural gas production averaged 1.23 billion cubic feet (Bcf) per day, down about 30 million cubic feet (MMcf) per day from the prior-year period, and about 20 MMcf below the second quarter level. Gas production would have been above second-quarter levels had it not been for the impact of Hurricane Ivan. In the third quarter, production from the Forties Field in the United Kingdom sector of the North Sea averaged 58,000 barrels of oil per day, up from 47,200 barrels per day in the second quarter, while oil production in Australia averaged 32,200 barrels per day, up 45 percent from the second quarter. Apache's share of production from the Zhao Dong block in Bohai Bay, China, rose to 7,900 barrels per day, up 32 percent from the second quarter. "Apache established a new production record despite the negative effects of Hurricane Ivan," said G. Steven Farris, president, chief executive officer and chief operating officer. "What made the difference was growth in other regions, including a 23 percent increase in production from the North Sea." Apache has drilled approximately 1,500 wells in the first three quarters of 2004. "With the impact of our recently completed acquisitions in the Permian Basin and the Gulf of Mexico, coupled with our active drilling program, we have great momentum going into the fourth quarter and into 2005," Farris said. Commodity prices remained strong in the third quarter. Apache received $38.04 per barrel of oil during the third quarter, up 39 percent from $27.34 in the prior-year period; $26.94 per barrel for natural gas liquids, compared with $18.99 per barrel, and $4.77 per thousand cubic feet (Mcf) of gas, compared with $4.45 per Mcf. Apache's debt-to-capitalization ratio rose slightly to 26.3 percent at the end of the quarter, from 23.2 percent at the end of the second quarter, because of the cost of assets purchased from ExxonMobil and Anadarko Petroleum. Apache Corporation is a large oil and gas independent with core operations in the United States, Canada, Egypt, the United Kingdom North Sea and Western Australia. -end- NOTE: Apache will webcast its conference call live at 1 p.m. Central Time on Oct. 28, 2004, from its Web site, www.apachecorp.com. The replay will be available on the Web site or by dialing (719) 457-0820 and using pass code 268728. The telephone replay will be available for one week beginning at approximately 5 p.m. on Oct. 28. This news release contains certain "forward-looking statements" as defined by the Private Securities Litigation Reform Act of 1995 including, without limitation, expectations, beliefs, plans and objectives regarding production, operating costs, exploration and acquisition activities. Any matters that are not historical facts are forward-looking and, accordingly, involve estimates, assumptions and uncertainties. There is no assurance that Apache's expectations will be realized, and actual results may differ materially from those expressed in the forward-looking statements. APACHE CORPORATION FINANCIAL INFORMATION (In thousands, except per share data)
FOR THE QUARTER FOR THE NINE MONTHS ENDED SEPTEMBER 30, ENDED SEPTEMBER 30, --------------------------------- ----------------------------- 2004 2003 2004 2003 ------------ ------------ ------------ ------------ REVENUES AND OTHER: Oil and gas production revenues $ 1,414,128 $ 1,110,015 $ 3,814,294 $ 3,129,507 Other (7,126) (5,474) (16,620) (4,001) ------------ ------------ ------------ ------------ 1,407,002 1,104,541 3,797,674 3,125,506 ------------ ------------ ------------ ------------ OPERATING EXPENSES: Depreciation, depletion and amortization 313,520 292,885 895,485 779,590 Asset retirement obligation accretion 11,071 11,342 32,723 27,100 Lease operating costs 204,890 194,574 608,016 514,995 Share appreciation plan - lease operating costs 874 - 11,866 - Gathering and transportation costs 20,902 16,948 60,698 43,940 Severance and other taxes 47,148 41,587 77,691 98,883 General and administrative 35,121 34,692 115,450 93,097 Share appreciation plan - general and administrative 854 - 11,866 - China litigation provision - - 71,216 - ------------ ------------ ------------ ------------ Total operating expenses 634,380 592,028 1,885,011 1,557,605 ------------ ------------ ------------ ------------ OPERATING INCOME 772,622 512,513 1,912,663 1,567,901 FINANCING COSTS: Interest expense 41,753 48,784 122,495 127,908 Amortization of deferred loan costs 652 557 1,814 1,624 Capitalized interest (12,593) (14,222) (38,951) (38,072) Interest income (962) (1,247) (1,795) (2,749) ------------ ------------ ------------ ------------ Net financing costs 28,850 33,872 83,563 88,711 ------------ ------------ ------------ ------------ Preferred interests of subsidiaries - 1,976 - 8,668 ------------ ------------ ------------ ------------ INCOME BEFORE INCOME TAXES 743,772 476,665 1,829,100 1,470,522 Provision for income taxes 310,037 199,704 673,143 636,883 ------------ ------------ ------------ ------------ INCOME BEFORE CHANGE IN ACCOUNTING PRINCIPLE 433,735 276,961 1,155,957 833,639 Cumulative effect of change in accounting principle, net of tax - - - 26,632 ------------ ------------ ------------ ------------ NET INCOME 433,735 276,961 1,155,957 860,271 Preferred stock dividends 1,420 1,420 4,260 4,260 ------------ ------------ ------------ ------------ INCOME ATTRIBUTABLE TO COMMON STOCK $ 432,315 $ 275,541 $ 1,151,697 $ 856,011 ============ ============ ============ ============ INCOME ATTRIBUTABLE TO COMMON STOCK BEFORE CHANGE IN ACCOUNTING PRINCIPLE $ 432,315 $ 275,541 $ 1,151,697 $ 829,379 ============ ============ ============ ============ BASIC NET INCOME PER COMMON SHARE Before change in accounting principle $ 1.32 $ 0.85 $ 3.54 $ 2.58 ============ ============ ============ ============ After change in accounting principle $ 1.32 $ 0.85 $ 3.54 $ 2.66 ============ ============ ============ ============ DILUTED NET INCOME PER COMMON SHARE Before change in accounting principle $ 1.31 $ 0.84 $ 3.50 $ 2.56 ============ ============ ============ ============ After change in accounting principle $ 1.31 $ 0.84 $ 3.50 $ 2.64 ============ ============ ============ ============ WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 326,294 323,751 325,657 321,908 ============ ============ ============ ============
APACHE CORPORATION FINANCIAL INFORMATION (In thousands)
FOR THE QUARTER FOR THE NINE MONTHS ENDED SEPTEMBER 30, ENDED SEPTEMBER 30, --------------------------------- ------------------------------- 2004 2003 2004 2003 ------------- -------------- -------------- -------------- CAPITALIZED COSTS INCURRED: North America exploration and development $ 379,908 $ 239,623 $ 1,097,718 $ 738,126 International exploration and development 207,597 128,797 551,294 326,829 -------------- -------------- -------------- -------------- $ 587,505 $ 368,420 $ 1,649,012 $ 1,064,955 ============== ============== ============== ============== Acquisitions: Oil and gas properties $ 490,832 $ 270,498 $ 490,832 $ 1,501,312 Gas gathering, transmission and processing facilities - - - 5,484 -------------- -------------- -------------- -------------- $ 490,832 $ 270,498 $ 490,832 $ 1,506,796 ============== ============== ============== ============== Capitalized interest $ 12,593 $ 14,222 $ 38,951 $ 38,072 ============== ============== ============== ============== Asset retirement obligation costs $ 116,944 $ 63,426 $ 130,125 $ 402,053 Actual retirement expenditures (17,854) (7,500) (32,846) (19,017) -------------- -------------- -------------- -------------- $ 99,090 $ 55,926 $ 97,279 $ 383,036 ============== ============== ============== ============== Property sales $ - $ (15,916) $ - $ (16,202) ============== ============== ============== ==============
SEPTEMBER 30, DECEMBER 31, 2004 2003 -------------- -------------- BALANCE SHEET DATA: Current Assets $ 1,587,190 $ 899,072 Property and Equipment, net 12,737,292 11,260,085 Goodwill 189,252 189,252 Other Assets 108,981 67,717 -------------- -------------- Total Assets $ 14,622,715 $ 12,416,126 ============== ============== Current Liabilities $ 1,144,828 $ 820,378 Long-Term Debt 2,735,032 2,326,966 Deferred Credits and Other Noncurrent Liabilities 3,071,238 2,735,984 Shareholders' Equity 7,671,617 6,532,798 -------------- -------------- Total Liabilities and Shareholders' Equity $ 14,622,715 $ 12,416,126 ============== ============== Common shares outstanding at end of period 326,471 324,497
NON-GAAP FINANCIAL MEASURES: The press release discusses Apache's cash from operations before changes in operating assets and liabilities. It is presented because management believes the information is useful for investors because it is used internally and widely accepted by those following the oil and gas industry as a financial indicator of a company's ability to generate cash to internally fund exploration and development activities, fund dividend programs, and service debt. It is also used by research analysts to value and compare oil and gas exploration and production companies, and is frequently included in published research when providing investment recommendations. Cash from operations before changes in operating assets and liabilities, therefore, is an additional measure of liquidity, but is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing, or financing activities. The following table reconciles net cash provided by operating activities to cash from operations before changes in operating assets and liabilities.
FOR THE QUARTER FOR THE NINE MONTHS ENDED SEPTEMBER 30, ENDED SEPTEMBER 30, ---------------------------- ------------------------------ 2004 2003 2004 2003 ----------- --------- ----------- ------------- Net cash provided by operating activities $ 1,021,486 $ 854,944 $ 2,320,538 $ 2,079,109 Changes in operating assets and liabilities (138,582) (124,308) 20,062 (64,651) ----------- --------- ----------- ------------- Cash from operations before changes in operating assets and liabilities $ 882,904 $ 730,636 $ 2,340,600 $ 2,014,458 =========== ========= =========== =============
APACHE CORPORATION FINANCIAL INFORMATION
FOR THE QUARTER FOR THE NINE MONTHS ENDED SEPTEMBER 30, ENDED SEPTEMBER 30, --------------------------------- --------------------------------- 2004 2003 2004 2003 --------------- --------------- --------------- --------------- FINANCIAL DATA (In thousands, except per share data): Revenues and other $ 1,407,002 $ 1,104,541 $ 3,797,674 3,125,506 =============== =============== =============== =============== Income Attributable to Common Stock $ 432,315 $ 275,541 $ 1,151,697 $ 856,011 =============== =============== =============== =============== Basic Net Income Per Common Share: Before change in accounting principle $ 1.32 $ 0.85 $ 3.54 $ 2.58 =============== =============== =============== =============== After change in accounting principle $ 1.32 $ 0.85 $ 3.54 $ 2.66 =============== =============== =============== =============== Diluted Net Income Per Common Share: Before change in accounting principle $ 1.31 $ 0.84 $ 3.50 $ 2.56 =============== =============== =============== =============== After change in accounting principle $ 1.31 $ 0.84 $ 3.50 $ 2.64 =============== =============== =============== =============== Weighted Average Common Shares Outstanding 326,294 323,751 325,657 321,908 =============== =============== =============== =============== Diluted Shares Outstanding 330,193 326,601 329,458 324,650 =============== =============== =============== =============== PRODUCTION AND PRICING DATA: NATURAL GAS VOLUME - MCF PER DAY United States 640,467 717,988 649,997 658,231 Canada 325,535 319,522 322,390 315,307 Egypt 141,072 100,965 135,709 112,534 Australia 121,088 114,248 118,587 107,415 North Sea 2,043 3,321 1,769 1,820 Argentina 3,467 7,858 3,985 7,466 --------------- --------------- --------------- --------------- Total 1,233,672 1,263,902 1,232,437 1,202,773 =============== =============== =============== =============== AVERAGE NATURAL GAS PRICE PER MCF United States $ 5.30 $ 5.00 $ 5.32 $ 5.40 Canada 5.10 4.47 5.10 4.87 Egypt 4.45 4.31 4.41 4.20 Australia 1.58 1.47 1.64 1.39 North Sea 4.36 1.88 4.57 1.95 Argentina 0.78 0.50 0.62 0.48 Total 4.77 4.45 4.79 4.76 OIL VOLUME - BARRELS PER DAY United States 65,017 75,593 67,110 68,535 Canada 24,743 25,790 25,409 25,143 Egypt 52,602 48,788 51,706 47,406 Australia 32,199 32,711 26,041 31,949 North Sea 58,031 42,111 49,866 25,320 China 7,948 3,131 7,121 1,055 Argentina 532 574 542 586 --------------- --------------- --------------- --------------- Total 241,072 228,698 227,795 199,994 =============== =============== =============== =============== AVERAGE OIL PRICE PER BARREL United States $ 41.45 $ 27.03 $ 36.90 $ 27.52 Canada 41.34 27.90 36.72 29.23 Egypt 41.51 27.16 35.81 27.30 Australia 46.72 29.04 40.96 29.45 North Sea 25.18 26.58 23.36 26.10 China 35.99 25.10 32.77 25.10 Argentina 31.28 28.42 33.28 29.14 Total 38.04 27.34 34.00 27.80 NGL VOLUME - BARRELS PER DAY United States 8,934 8,241 8,218 7,265 Canada 2,794 1,445 2,665 1,582 --------------- --------------- --------------- --------------- Total 11,728 9,686 10,883 8,847 =============== =============== =============== =============== AVERAGE NGL PRICE PER BARREL United States $ 27.56 $ 19.23 $ 25.25 $ 20.99 Canada 24.94 17.62 22.90 18.85 Total 26.94 18.99 24.67 20.60
EX-99.2 3 h19489exv99w2.txt PRESS RELEASE DATED OCTOBER 26, 2004 Exhibit 99.2 CONTACTS: (MEDIA): BILL MINTZ (CELL) (281/770-8865) TONY LENTINI (CELL) (713/907-5841) (INVESTOR): ROBERT DYE (713/296-6662) FOR IMMEDIATE RELEASE APACHE EMPLOYEES REWARDED FOR SHAREHOLDER VALUE INCREASE OF $9 BILLION-PLUS IN FOUR YEARS Houston, Oct. 26, 2004 - Apache Corporation (NYSE, NASDAQ: APA) today announced that it has achieved its goal of doubling its share price in the last four years, adding more than $9 billion in shareholder value. Approximately 1,900 employees will share special incentives in the form of Apache stock paid in three annual installments, reducing Apache's fourth-quarter 2004 net income by approximately $54 million, or 16 cents per diluted common share. In April 2004, Apache employees passed the first threshold in the company's Share Price Appreciation Plan when the stock price reached $43.29 per share. Stock distributed as a result of that achievement will reduce 2004 net income by $16 million, or 5 cents per diluted common share. The second appreciation target was achieved today, when Apache's share price closed at $ 54.05. Under the second achievement, people employed at Apache when the conditional shares were granted in December 2000 will receive shares equivalent to at least 75 percent of their annual salaries at that time. Employees hired after December 2000 but before May 1, 2003, will receive prorated awards. More than 90 percent of the incentives will be paid to non-executive employees. For the two targets achieved to date, the company will issue approximately 3.3 million shares of common stock, net of tax withholding, for the employee awards. -more- APACHE SHARE APPRECIATION PLAN - ADD 1 Total cost of the program is estimated at $215 million over three years, or about 2 percent of the increase in shareholder value. The current Share Price Appreciation Plan was conceived when the stock price was trading in the range of $60 per share ($25.97 adjusted for the subsequent split and stock dividends), with incentives tied to three appreciation thresholds of $100, $120 and $180 per share, each of which had to be attained for 10 out of 30 consecutive days before year-end 2004. Adjusted for the subsequent split and stock dividends, the threshold targets are now $43.29, $51.95 and $77.92 per share. "Reaching this goal is a great achievement, both for Apache shareholders and our employees," said G. Steven Farris, the company's president, chief executive and chief operating officer. "Higher prices have certainly helped, but in the last four years Apache's reserves have doubled to 1.7 billion barrels equivalent and production has increased 87 percent to approximately 460,000 barrels of oil equivalent per day. Apache employees under this plan are definitely happy campers." Along with very strong prices, Apache has added nearly $1 billion in properties through acquisitions this year and will drill approximately 1,950 wells that set the stage for future growth of the company. Apache Corporation is a large oil and gas independent with core operations in the United States, Canada, Egypt, the United Kingdom North Sea and Australia. -end- This release contains certain "forward-looking statements" as defined by the Private Securities Litigation Reform Act of 1995, including, without limitation, expectations, beliefs, plans and objectives regarding Apache's drilling plans. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are the availability of needed personnel and equipment for the future exploration and development, fluctuations in oil and gas prices, and general economic conditions. -----END PRIVACY-ENHANCED MESSAGE-----